Will Cross-Border WeChat Selling Be The Next Big Thing for Travel Retail?
Updated: Jan 16, 2019
Travel retail players around the world are gearing up for Chinese New Year as millions of Chinese plan to travel overseas. Ctrip figures show that ~6.5 million Chinese tourists went overseas during last year’s Chinese New Year.
WeChat is a powerful tool in helping travel retail players market to and retain outbound Chinese travelers. Its billion-plus user base, social media features, and marketing/CRM tools constitute a platform that is perfect for cross-border travel retailers.
Now, with the development of cross-border WeChat shops, these companies can sell to Chinese travelers even after they go home. We dig deeper and talk about how this could take the travel retail industry to a whole new level.
The Importance of WeChat Marketing in Travel Retail
Travel retail is important to brands because many foreign brands in China are first discovered overseas before becoming popular in the China market. In fact, many daigou and China influencers started out as Chinese students who built their fan bases by blogging about their experiences and products overseas.
Travel retail is also important for branding because the products’ foreign-ness conveys a sense of quality and exclusiveness, since some of the products cannot be found in China.
WeChat is a key marketing tool that enables travel retail players to reach Chinese outbound tourists. Core to WeChat content marketing is the WeChat official account, which is an official brand page that can push marketing content and promotions to its followers. But WeChat has many features that make it a powerful marketing platform for brands.
Let’s take a look at how WeChat can be used to market to a typical outbound tourist visiting an international department store:
Pre-Trip: Brand Education & Awareness
International department store pushes a combination of WeChat advertising and content through its official account to reach Chinese tourist
Upon Landing: Location-Based Advertising
International department store pushes location-based WeChat ads to remind the tourist to visit
At Store: Check-Out / Payments
Tourist uses WeChat Pay to make a purchase. Using WeChat Pay automatically subscribes customer to the brand/retailer’s WeChat Official Account.
Returning to China: Post-Sales Marketing and Subsequent Purchases
The brand/retailer continues to push WeChat marketing content to the tourist. The tourist is enticed by a new product and makes a purchase on the retailer’s other channels in China, such as the retailer’s own site or Tmall Global.
As you can see, WeChat plays a crucial role in helping brands market to and retain Chinese customers, throughout every step of the customer’s journey.
WeChat also connects retailers and Chinese customers through its CRM features. Even if customers do not make a purchase, retailers can still obtain their WeChat information so that they can continue to connect with them after they have left the store.
This online activation gives retailers a key advantage over pure offline players. However, this is not a closed loop process as customers have to move to a separate channel to make purchases back home, which make it difficult to track and retain customers.
To give a more concrete example, here is a picture of Japanese pharmacy chain Takeya using WeChat QR code links to convert offline traffic to online WeChat followers.
Afterwards, its WeChat official account continues to push marketing content and promotions. This way, its customers will make purchases through Takeya’s cross-border e-commerce site even when they’re back in China.
DFS Group’s WeChat Mini-Program Takes Things One Step Further
DFS Group, one of the world's largest operators of duty-free stores and travel retail properties, has taken its WeChat presence one step further by building an innovative online-to-offline (O2O) mini-program store.
Customers can pre-order goods and pre-pay for them on the mini-program, later picking them up at the nearest DFS store. This reduces crowding and long lines.
The below diagram demonstrates how DFS uses WeChat Moments ads to reach customers, who then progress to its mini-program store, and make purchases with WeChat Pay. The user can choose from three DFS locations in Hong Kong to pick up his/her goods.
Cross-Border WeChat Stores Can Help Travel Retail Players Branch Into Cross-Border E-Commerce
The next step for a retailer like DFS Group could be adopting cross-border shipping capabilities, after which the retailer can sell to Chinese customers through cross-border e-commerce.
Mini-program stores would then form a closed loop that starts with attracting offline retail traffic, using WeChat to retain and market to those visitors, and eventually making a sale through cross-border e-commerce after those visitors have returned home.
Here’s a hypothetical scenario:
1. Chinese tourist browses perfume store in downtown Sydney
2. Chinese tourist wants to purchase a bottle of perfume, but the store ran out and they don’t sell directly in China. The tourist’s flight leaves that day.
3. Shop attendant gets the tourist to follow their WeChat account.
4. Tourist goes back to Shanghai. Once she lands, she sees a new article from the WeChat account, reminding her about her just-missed purchase.
5. Article links back to the merchant's cross-border WeChat store, which is equipped with cross-border payments and shipping operations.
6. Tourist sees that they now have her perfume in stock, and makes an online purchase on the merchant’s WeChat store.
7. The perfume is shipped from Australia to her home in Shanghai in five days.
In this scenario, not only does WeChat act as a content marketing and customer retention tool, but it also acts as a lightweight, cross-border sales channel that makes it easy for customers to make purchases after they go back home.
This is important because it takes time for customers to get to know new brands and products, but the time frame for travel retail merchants to make a sale is oftentimes too short.
Educating and selling to Chinese customers after they return home can add a substantial amount of value. Additionally, it is much more likely that new brands will spread via word of mouth back home, and WeChat, with its social features, is a key enabler of this.
1. Travel retail is where Chinese consumers discover foreign brands for the first time, and retailers use WeChat to market to them. WeChat can be used for content marketing, advertising, payments, customer relationship management, and more.
2. Cross-border omni-channel strategies are beginning to emerge. DFS Group’s WeChat mini-program store now enables Chinese tourists to make purchases online and pick them up at its offline retail stores in Hong Kong
3. Travel retail players can now use cross-border WeChat stores to sell to Chinese customers even after they go back to China. This is important because it takes time for new brands and retailers to build trust with their customers and the time frame for making purchases through travel retail is quite limited.
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